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Platinum’s Changing Investment Story: Deficits, Geopolitics and New Sources of Demand

Sat, 08 Aug 2026 00:00:00 EST

Platinum and palladium have participated in the broader precious-metals rally, but beneath the price action, important differences are emerging.

Money Metals host Mike Maharrey recently spoke with https://platinuminvestment.com/about-wpic/our-team"; target="_blank" rel="noopener">Edward Sterck, Director of Research at the World Platinum Investment Council (WPIC), about persistent platinum supply deficits, palladium’s dependence on the auto industry, geopolitical risks, trade policy, and potentially significant new sources of demand from hydrogen and artificial intelligence.

As of August 6, 2026, https://www.moneymetals.com/platinum-price";>platinum was trading at around $1,728 per ounce, putting the metal well above the range that confined it for much of the previous decade.

(Interview Starts Around 6:45 Mark)

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Platinum Breaks Out After a Decade

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For roughly 10 years, platinum remained largely range-bound between about $900 and $1,100 per ounce. That changed in May 2025, when the metal began a sharp rally https://www.moneymetals.com/news/2025/12/13/platinums-80-surge-3-hidden-forces-driving-it-004547";>that continued into January 2026.

https://www.linkedin.com/in/edward-sterck-45339491/"; target="_blank" rel="noopener">Edward Sterck said the initial catalyst was supply and demand.

The platinum market had entered its third consecutive year of significant deficits. Since commodity markets must ultimately balance, those shortfalls were filled by drawing metal from above-ground inventories. Eventually, those stocks fell to what Sterck called “unsustainably low levels,” forcing prices higher to entice holders to sell.

By the middle of the fourth quarter, another force took over. A broad precious-metals rally led by gold reflected growing demand for hard assets with value independent of the U.S. dollar.

Sterck characterized it as a “de-dollarization” or “sell America” trade. As demand spilled beyond gold, investors moved into silver, platinum, palladium and even copper.

After reaching what Sterck described as “frothy” levels in January, platinum corrected. It subsequently traded around $2,000 per ounce for a period before coming under renewed pressure. By August 6, the spot price had retreated to roughly $1,728 per ounce.

Middle East Conflict Changes the Picture

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Conflict in the Middle East subsequently altered the macroeconomic environment for precious metals.

Higher oil prices increased inflation expectations and, in turn, expectations for higher Federal Reserve interest rates. That supported the dollar and weighed on dollar-denominated commodity prices.

There has been some direct impact on platinum demand because Middle Eastern oil refineries use platinum-based catalysts. When those facilities go offline, demand for catalysts can decline at the margins.

But Sterck said that effect is relatively small. The bigger influence has come through inflation expectations, anticipated Federal Reserve policy, and the dollar.

Despite those macro pressures, Sterck said the underlying supply-demand fundamentals for platinum remain favorable.

Why Platinum and Palladium Are Diverging

One of the https://www.moneymetals.com/news/2026/06/29/signs-of-divergence-in-the-platinum-and-palladium-markets-005017";>biggest differences between platinum and palladium comes down to who uses the metals.

About 40% of global platinum demand comes from catalytic converters used in vehicles with internal-combustion engines. Vehicle electrification therefore represents a long-term demand headwind, although Sterck believes the transition is taking longer than many analysts previously expected.

Palladium is much more exposed. More than 80% of palladium demand is tied to the automotive sector.

Recycling creates another potential problem for palladium. https://share.google/k6Nzz1FU9WZ42ENPh";>WPIC expects rising recycling supply, combined with the gradual drag from vehicle electrification, eventually to push the palladium market into surplus.

But that transition keeps getting delayed.

Palladium remains in deficit today. Sterck said the existing shortage could allow the metal to continue https://news.metal.com/newscontent/104043754-platinum-and-palladium-surge-violently-spot-consumption-remains-sluggish-smm-daily-review"; target="_blank" rel="noopener">trading alongside the broader precious-metals complex over roughly the next 12 months, even as bearish longer-term sentiment hangs over the market.

Russia Adds a Palladium Wild Card

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Palladium’s supply profile makes that bearish outlook more complicated.

Russia produces about 40% of global palladium supply. A disruption at a Russian mine or another event restricting Russian supplies could therefore trigger a sharp price spike, particularly with futures positioning already skewed toward the downside.

Platinum has considerably less Russian exposure.

About 70% of global platinum mine supply comes from South Africa, rising to roughly 80% for Southern Africa when Zimbabwe is included. Russia accounts for only about 11%.

https://www.moneymetals.com/buy/palladium";>Palladium, by comparison, is concentrated between South Africa and Russia, with each producing roughly 40% of global supply.

That geopolitical exposure could also influence how automakers substitute platinum and palladium. In gasoline vehicles, Sterck said the two metals are almost one-for-one substitutes.

But manufacturers cannot simply switch between the metals whenever prices change. Once a vehicle model has completed certification and entered production, automakers generally do not alter the platinum-group-metal mix in its catalytic converter. Substitution therefore tends to occur as future models are designed and certified.

Tariff Fears Send Platinum Into the U.S.

U.S. trade policy has already produced dramatic movements in physical metal.

Sterck traced the shift to November 2024, when it became increasingly clear that tariffs would play a major role in the incoming administration’s trade policy.

U.S. end users and market participants began bringing platinum and palladium into the country ahead of anticipated needs, concerned that future trade barriers could affect metal availability.

Visible platinum inventories associated with U.S. futures exchanges surged from roughly 150,000 ounces to around 750,000 ounces—a fivefold increase. Sterck emphasized that exchange inventories represented only the visible portion of the movement, meaning additional metal could have entered the country without being deposited in those warehouses.

As some trade fears eased during 2026, metal began flowing out of futures exchange warehouses and back into the broader market, helping relieve some of the immediate tightness.

Uncertainty remains, however, including investigations under Sections 232 and 301 of U.S. trade law. Palladium faces an additional risk from a U.S. International Trade Commission case involving allegations of Russian dumping. An earlier ruling found no injury to the United States, but the decision has been appealed.

Expensive Gold Gives Platinum Jewelry an Opening

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High gold prices have also created an unusual opportunity for platinum in the jewelry market.

Platinum generally competes in the mid-range and fine-jewelry segments, particularly against white gold. White gold was originally produced as a lower-cost alternative that could visually resemble platinum.

But soaring gold prices turned that relationship upside down.

Sterck said white-gold jewelry was at one point being sold at a https://www.moneymetals.com/buy/platinum/platinum-jewelry";>premium to platinum jewelry, even at the retail level. That has contributed to relatively consistent growth in platinum jewelry demand in markets such as the United States and Europe.

China remains a notable exception.

Platinum jewelry became fashionable there during the late 2000s and early 2010s, with demand peaking around 2014. Since then, government policies and changing consumer preferences have contributed to a steady decline.

Hopes that soaring gold prices would spark a major revival in Chinese https://www.cmegroup.com/articles/2026/platinum-jewelry-demand-update.html"; target="_blank" rel="noopener">platinum jewelry demand have so far proved disappointing.

The Investment Case for Platinum

For investors accustomed to gold and silver, Sterck said platinum offers something different because of the diversity of its end uses.

Its industrial exposure makes platinum somewhat more pro-cyclical than gold, potentially giving it a different role within a diversified precious-metals portfolio.

Supply remains a major part of the investment case.

Sterck expects https://www.moneymetals.com/news/2026/05/18/structural-supply-deficits-forecast-to-continue-driving-platinum-group-metal-prices-higher-004925";>platinum deficits to persist for the foreseeable future, although investment demand could determine how tight the market remains this year. ETF outflows and metal leaving exchange warehouses could push the market closer to balance.

Monetary policy could also play an important role. Sterck believes the market may be overestimating the likelihood of Federal Reserve rate hikes. His personal expectation is for a relatively flat rate environment this year, which could provide renewed support for the precious-metals complex.

Hydrogen and AI Could Drive New Demand

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Perhaps the most intriguing part of the platinum story involves emerging sources of industrial demand.

One is hydrogen.

Sterck argued that geopolitical instability could encourage countries in Europe and East Asia to place greater emphasis on energy security and accelerate development of the hydrogen economy.

He compared the potential effect to the way the oil crisis of the 1970s helped catalyze North Sea oil and gas development in Europe. Platinum is used within hydrogen technologies, making broader adoption a potentially significant source of future demand.

Artificial intelligence represents an even newer opportunity.

Sterck said WPIC has only become fully aware of some of these applications during the past six months. Semiconductor manufacturing and optical-crystal production for data-center interconnects could represent significant end uses for platinum, palladium and other platinum-group metals.

These applications are still being quantified and may not yet be fully reflected in existing supply-demand forecasts.

Could Platinum Outpace Gold Again?

Maharrey closed by asking whether platinum could ever regain its historic premium over gold.

Sterck noted that from 1980 through today, platinum has averaged roughly twice the gold price, even including recent years when platinum traded at a significant discount.

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Platinum is also extraordinarily scarce. According to Sterck, it is about 30 times less available than gold.

But gold possesses an important advantage: it is a monetary asset, while platinum is not.

Gold’s larger and more liquid market has made it the preferred asset for central banks looking for alternatives to the dollar-dominated financial system. Sterck said that dynamic has helped drive central-bank gold buying since roughly 2014.

With the global system moving toward a more multipolar and uncertain geopolitical environment, Sterck sees little reason for that trend to disappear soon.

Platinum nevertheless https://www.moneymetals.com/buy/platinum";>offers a different investment story. Persistent deficits have depleted inventories, global mine supply is highly concentrated, and traditional automotive and jewelry consumption could increasingly be supplemented by hydrogen, AI infrastructure and other emerging technologies.

For precious-metals investors accustomed to thinking primarily about gold and silver, platinum may be worth watching precisely because the forces driving it are different.

Could Platinum Ever Outpace Gold Again?

Fri, 07 Aug 2026 00:00:00 EST

Welcome to this week’s market wrap podcast, I’m Mike Gleason

Coming up don’t miss our exclusive interview with Edward Sterck of the World Platinum Investment Council. Mike Maharrey and this week’s guest dive into the Platinum Group Metals and in particular discuss why we’ve seen a divergence between the price of platinum and the price of palladium and what’s behind that dynamic.

Mr. Sterck also talks about how the war with Iran, tariffs and trade policy have impacted the PGMs in recent months, and shares his insights on how the western world, in particular, is starting the favor platinum jewelry over white gold – which has seemingly fallen out of favor – and what impact that may have on platinum from a jewelry demand standpoint moving forward.

So, be sure to stick around for another fascinating Money Metals interview with this week’s guest Edward Sterck of the World Platinum Investment Council, coming up after this week’s market update. And as a reminder please download, like, rate and subscribe to this podcast wherever you consume this content.

Well, it turned out to be a pretty good week to own gold and silver.

After a rough finish to July, the precious metals market got back on its feet this week. Gold clawed its way higher day after day, silver outperformed once again, and then Friday's weak U.S. jobs report poured gasoline on the rally.

The week's biggest story wasn't really gold or silver. It was the growing realization that the U.S. economy may finally be slowing enough to force the Federal Reserve's hand.

Early in the week, the backdrop was already improving for precious metals. Treasury yields drifted lower, the dollar softened, and traders continued digesting last week's surprisingly contentious Fed meeting. While the central bank left interest rates unchanged, the unusually public disagreement among policymakers suggested the consensus around "higher for longer" isn't nearly as solid as it once appeared.

At the same time, crude oil prices eased as geopolitical tensions in the Middle East showed signs of cooling. That might sound like bad news for safe-haven assets, but lower energy prices also take some pressure off inflation. And when inflation expectations ease, markets begin dialing back expectations for future rate hikes. That's often a winning combination for gold.

Then came Friday morning.

Economists were looking for another month of modest job growth. Instead, the Labor Department reported that the economy actually lost jobs in July. As if that weren't enough, payroll gains from the previous two months were revised sharply lower. Suddenly, the story wasn't about a resilient labor market anymore. It was about an economy that's showing unmistakable signs of losing steam.

Markets didn't need long to figure out what that could mean.

Treasury yields fell. The dollar dropped. Traders immediately began pricing in a much lower probability of additional Fed tightening this year. And gold and silver took off.

It's another reminder that precious metals don't just respond to inflation. They respond to expectations. And expectations changed dramatically in just a matter of minutes.

If investors become convinced the Fed is finished raising rates – or even that rate cuts could move closer onto the horizon – that changes the calculus. Lower interest rates reduce the opportunity cost of owning gold. A weaker dollar makes both gold and silver more attractive around the world. That's exactly the environment the metals found themselves in by the end of the week.

Silver, meanwhile, once again reminded everyone that when the precious metals sector starts moving, it often moves first – and faster. That's the nature of silver. It tends to lag during periods of uncertainty, but once momentum builds, it frequently outpaces gold by a wide margin.

Of course, one jobs report doesn't make a trend. Next week's inflation data and the reports that follow will still matter. The Fed isn't likely to declare victory over inflation overnight, and policymakers will want more evidence before changing course.

But the direction of the data is becoming harder to ignore.

For the better part of three years, the Fed has justified restrictive monetary policy by pointing to a remarkably strong labor market. If that pillar starts to crack, the entire policy outlook begins to shift. Markets know it. And judging by Friday's reaction, precious metals investors know it too.

Stepping back, this week was a perfect example of why it's dangerous to focus on just one headline. Gold spent the week balancing competing forces – easing geopolitical tensions on one hand and weakening economic data on the other. By Friday, the growth story clearly won out.

So, as we wrap up the week, the bulls have regained some momentum. Gold is pushing toward recent highs, silver is once again showing why it can be the more explosive metal, and investors are heading into next week asking a very different question than they were just a few days ago.

The question is no longer whether the economy is slowing. It's whether it's slowing enough to force the Federal Reserve to blink.

And that's a story gold and silver investors will be watching very closely.

Well, before we get to this week’s interview let’s take a look at the specifics of the weekly price action in the metals.

Gold is up nearly $300 or a whopping 7.3%. The yellow metal is having its best week since January and currently checks in at $4,341 an ounce.

Turning to silver, it shows an outsized gain of 10.7%, up more than $6 on the week to trade at $63.84 as of this Friday late morning recording.

As for the PGMs, which will be the subject of our upcoming interview, platinum is up a cool $100 or 6.2% to check in at $1,753 an ounce. Palladium is up just over $100 itself, advancing 8.1% since last Friday’s close to trade at $1,389.

Well now, without further delay let’s get right to this week’s exclusive interview.

Mike Maharrey: Greetings, I'm Mike Maharrey and I'm joined today by Edward Sterck. Edward is the director of research at the World Platinum Investment Council, and really excited to talk to you today. How are you doing today?

Edward Sterck: Edward? Yeah, good, thanks, Mike. Thanks for having me on. I'm looking forward to a good conversation.

Mike Maharrey: Yeah, absolutely. So, usually we talk a lot about gold and silver on this show. We don't talk about platinum as much, although maybe we should. So I'm really excited to get your perspective on what's been going on with platinum and palladium. Just kind of watching the price trajectory, it is kind of followed gold and silver. We saw a big run up late last year into January, then we saw a correction, and then we've had a little bit of sideways trading over the last several months. So, what I would kind of like you to do, if you can, is just maybe talk about and compare and contrast the dynamics that are driving these two markets. What might be similar to what we're used to in gold and silver, and what are some things that might be different that are impacting platinum and palladium right now?

Edward Sterck: Well, I think it's a really interesting question because things have changed quite a lot over the last 15 months or so. And actually a helpful guide to how things have changed has actually been the price performance. So, if you look at platinum, it was largely range bound for 10 years or so between roughly $900 and let's say $1,100 per ounce roughly. And then in May of last year, it began to rally quite hard. And that obviously continued through until January of this year. Now, I think if you look at the catalyst for the rally, it was very much driven by supply demand fundamentals. We were in our third year of significant platinum market deficits. Obviously in commodity markets, you can't have a deficit, so it's balanced by drawing down from above-ground stocks. And I think those were just depleted to unsustainably low levels. And as a result, in order to, I guess, effectively for the owners of those above-ground stocks to release more metal to the market, they just had high value expectations.

So, you see the price move higher to incentivize metal in and so on. And that was really what drove the market ultimately up until about the middle of the fourth quarter. And then I think what we saw then is a broader precious metal rally start catalyzed to a large degree by gold and a pivot towards hard assets that whilst being priced in US dollars are dollar independent in terms of their material value. So, it was a de-dollarization trade. Some people termed it the “sell America” trade. But that kind of demand for gold, there really wasn't enough gold around. And so we saw that kind of cascade into silver, into platinum, into palladium, and even into some of the more investible based metals like copper as well. And that's really what has been driving the market since then. So we saw that price rally continue into January.

It hit probably what were frothy levels at the time. We then saw a fairly sensible price reset. And I think the press metals complex found a level for platinum that was around $2,000 an ounce. That's where the market saw value and it stayed there really up until the beginning of the conflict with the Middle East. And at that point, things changed. We saw higher oil prices drive higher interest rate or higher inflation expectations, and so therefore higher federal reserve rate expectations. That obviously means a stronger dollar and therefore weaker US dollar commodity prices. But I think at the same time, addressing your question, the whole complex is still trading on a precious metal theme rather than supply demand fundamentals. I mean, that said, the supply demand fundamentals for platinum do look quite good still.

Mike Maharrey: How has the war affected the market? And has there been any kind of physical disruption as far as moving metal from one place or another? Or has it been more of just the kind of general market sag we've seen overall with the war?

Edward Sterck: I'd say it's more of the latter. There's some demand destruction at the margins. So, the Middle East, obviously there's significant oil refining capacity there. Platinum-based catalysts are used in those facilities. So when they're offline, in theory, the need for those catalysts reduces a little bit, but it's not that significant in the broader scope of things. But for the most part, the bigger impact has been the effect on inflation expectations, movements in what people are anticipating in terms of federal reserve activity, monetary policy, and so on. And that's just been a bit of a drag on the whole complex.

Mike Maharrey: Yeah. Yeah, that makes sense. So, back in June, I wrote an article and it was based after some data that was released by Metals Focus. And it talked about the fact that there's been this divergence over the last few months between platinum and palladium with a little bit more of a bearish sentiment toward palladium and more bullish toward platinum. Can you explain the dynamics that are going on between those two particular metals and what's driving this divergence?

Edward Sterck: Yeah, absolutely. So, it comes down really to their end users. So, in terms of platinum, around 40% of global platinum demand is for catalytic converters going into vehicles with internal combustion engines. Ultimately, as the world continues to electrify vehicles, that's ultimately a drag on demand. We think that process is going to take longer than a lot of market commentators have in the past. I think most people have come down to where we are now. And so that means a kind of higher for longer demand profile for PGMs. The problem for palladium is whilst platinum is around 40% exposed to the automotive market, for Palladium it's over 80%. And so that just creates a negative sentiment around the metal. But the bigger problem is ultimately actually recycling rates. So, for palladium, we're expecting much more recycling supply to come into the market and that to drive it into a surplus in combination with that slow automotive drag.

Edward Sterck: And that kind of trend I think is well, it's well understood by the market. If I'm honest with you, that kind of tipping point from a deficit for Palladium, which is what we're still in, into a surplus is constantly being pushed back. So, there's kind of bearish sentiments towards palladium that's been circling for a number of years now. It kind of doesn't go away, but it also actually isn't always reflective of the reality in the near to medium term. So, palladium, it is still in deficit at the moment. I think given there's a shortage of metal, we'd probably expect it over maybe a 12-month outlook to continue to trade and step with the rest of the precious metals. But it's just worth bearing in mind that there is that sort of slightly bearish overlay. I think one of the other things of course as well is that, I mean, reflecting a little bit on the futures market now, the futures market for palladium is always skewed towards the downside.

So, that overall bearish sentiment is playing out in positioning there. But the problem with that is it means any kind of disruption to palladium supply. I mean, for example, Russia produces 40% of global palladium supply. If there was a problem with one of their mines, then you see a sharp spike in palladium prices. So it's very vulnerable to these short, sharp price rallies that's worth bearing in mind because they present an opportunity.

Mike Maharrey: Yeah. Yeah, definitely. That's interesting. I know just enough about the platinum and palladium use in catalytic converters to be dangerous. So I'm going to throw out some things and I would like for you to confirm or tell me I'm an idiot and I'm wrong. The two metals are somewhat substitutionary in catalytic converters, right? You can use both platinum and palladium. So, if platinum gets significantly higher, they could switch to palladium and vice versa. But as I understand it, the process that required to make that switch isn't something you can just snap a finger and do it. Is that kind of a fair overview?

Edward Sterck: Yeah, no, absolutely. I mean, particularly in gasoline vehicles, they're almost one-to-one substitutable. But for the automakers, once you've gone through the certification process for a new model and it's in production, you don't change the mix of PGMs in the catalytic converter. So, if you design that vehicle as we had over the last few years, a low platinum price environment and a high palladium price environment, you go with a stronger platinum mix. Ultimately, in our numbers, we assume that we begin to see a reversal in favor of palladium just because of the balances in the market that we see. But at the same time, there's some sort of supply chain risk management considerations that may encourage at least Western automakers to stick with a higher platinum ratio in their catalytic converters. And that's mostly related to Russia. So if we think about global mine supply, for platinum, about 70% comes from South Africa, about 80% from Southern Africa, including Zimbabwe.

Edward Sterck: And only 11% of platinum comes from Russia. For Palladium, it's 40% South Africa, 40% Russia. So even if you're not buying Russian Palladium, you're still increasing your market risk to it. Say, for example, I don't know, the powers that be suddenly decided to sanction Russian Palladium, then obviously that would have quite a big impact in terms of the availability of metals for the market as a whole.

Mike Maharrey: That's very interesting. How has the tariff situation impacted platinum and palladium? Have they been widely exempted or are they being impacted by the tariffs? And do we have any sense of how that might play out down the road given the volatility of the current administration when it comes to trade policy?

Edward Sterck: Yeah, I mean it's been a wild ride. So, if we think back to, I came back to November 2024 when it became increasingly clear that the incoming administration was going to have tariffs as a major part of its policy effective trade policies and I guess international policy considerations. We began to see that reflected in the metals markets by, for platinum and palladium, high lease rates. So that's the cost of borrowing metal and it's indicative of when you're having shortages in the market. And what we gradually discovered is that there were a lot of end users and market participants in the US who were onshoring metal ahead of their needs because they were concerned about potential future trade barriers effectively impacting the availability of metal, at least at then prices. So the visible portion of that for both metals is the exchange warehouse inventories that were associated with the futures markets.

And those went up for platinum from around 150,000 ounces to around 750,000 ounces. So, quite a large volume of metal that moved into the US. And like I said, that's just the visible portion. There's other metal that may not have been lodged with the exchange. I think as 2025 and 2026 has unfolded, some of those trade fears have abated mainly this year rather than last year. So we have seen some metal come out of those futures exchange warehouses and back into the market, which has helped ease some of the market tightness in the short term. I'd say there are still some overhangs or potential future risks rather. So you've got the Section 232 investigation into critical minerals that was supposed to conclude in July, and that data's been missed. So it's something that could come in at any time. I think let's be realistic. If you've got critical minerals, why would you tariff them?

So, I think the likelihood of tariffs is fairly low. You're more likely to say to South Africa, "Okay, we want some kind of preferential trade agreement or we're going to tariff your wines or something." I don't know.

There's also, you've got the section 301 investigations that are ongoing. Those are mainly focused on manufactured goods. So, the impact for that from a precious metal perspective is that there's potential, particularly for platinum and palladium, that automotive parts that contain those metals might get tariffs. That might make things like vehicles more expensive, which is slightly negative for demand. And then finally, you've got a USITC investigation into allegations of Russian dumping of palladium into the US market. Now that's already been through the courts once. And at the very last moment it was ruled that there wasn't any damage to the US, but that ruling has been appealed, so it's going to go through the appeal process now. So that's something that could maintain some tension in the Palladium market.

Mike Maharrey: Yes. Courts can always create tension. No doubt about that. Are there significant military applications for platinum and palladium? I know that I've talked to folks that are heavily involved in the silver market and they say yes, the increase in defense spending and wars and stuff definitely increase silver demand, but nobody can really pinpoint how much. How does platinum and palladium … how does they fit into the defense and military sector?

Edward Sterck: I mean, the answer is that the defense industry needs those metals. It's one of the reasons that they have been identified as being critical minerals by the US and by many other countries and geographies around the world is because of the fact that they are actually really essential to the production of a lot of military hardware. From a demand perspective, it doesn't really move the needle, but it's just that you absolutely have to have them. And so I mean, it's things like some of the semiconductors that go into missiles and drones. These metals are very tolerant of high temperature environments. So, that means that they can be used in applications where other metals cannot be used. Things like ruthenium, which is another platinum group metal, it's not particularly investible, but just to give you an example, cruise missiles use ruthenium nickel alloys in the turbine blades.

Again, because of the high temperature resistance and that's a characteristic of the metal that you can't get from any other metal. I mean, ruthenium, it's precious metal still. It's still $1,600 an ounce or something. So, you're only going to use it if you really have to.

Mike Maharrey: Yeah. Interesting. How has the higher price for gold and silver, how has that impacted the market for platinum jewelry? My mom loved platinum jewelry when I was growing up in the 80s. That was her thing. So, I kind of have a soft spot for platinum in terms of jewelry. I'm curious, as the price has gone up for gold and silver, has that given a boost to the platinum market or of course platinum's gone up too. How have you seen that playing out?

Edward Sterck: So, I'd say silver's a bit different. It's addressing a different part of the jewelry market to platinum. It's more of the mass market. Platinum is typically mid-range to fine jewelry. There have been some benefits, particularly in markets like the US and in Europe, which are quite big white gold markets because the gold price, white gold as an alloy, was produced to be a low cost alternative to platinum that looked superficially visually simulate. But the gold price went so high that actually white gold was being priced at a premium to platinum at one point. And this is in the store, it's not just in a wholesale level. So we've seen fairly consistent, steady growth in jewelry demand in the world as a whole, except for in China. So China platinum was a very in vogue metal in the late 2000s and early 2010s. Demand peaked in about 2014.

And then we've just seen a number of factors that have eroded jewelry demand as a whole in China. It's impacted gold as well. Things like the clampdown on what they termed gift giving in China was negative for all of the precious metals and diamonds as well. But also we've just seen consumer preferences and consumer demands shift more towards things like the latest smartphone and handbag and stuff like that and experiences. So people are just spending their money elsewhere. So, China for platinum, we've just seen a steady downward decline in jewelry demand. Last year we got a bit excited that it was about to be reborn because of the high gold prices, but it proved to be a bit of a damp squib.

Mike Maharrey: Interesting. So, I’ve got kind of a meta question for you. A lot of folks that are listening to the show are gold and silver investors. We talk about gold and silver a lot. As I mentioned upfront, we don't talk about as platinum as much, but we do sell platinum products at money metals and also palladium. And we recognize its value as an investment metal as well as industrial. Of course, it's not a monetary metal, so that makes it a little different than gold and silver. So, if I'm a guy that's sitting out here in the audience right now and I'm listening to this conversation, I'm thinking, well, this is interesting. You haven't really thought about platinum or palladium. How would you talk to them and what would you say to them to give them a reason to maybe invest in platinum? Why would it be a good idea to diversify a precious metals portfolio with platinum and/or palladium?

Edward Sterck: Well, I think for platinum, in particular, one of the things that makes it stand out is the diversity of its end users. So, it's exposed to so many different sectors. You can think of it versus gold as being a little bit more pro-cyclical as a result. So it sits in a slightly different part of your portfolio as a result and provides some different opportunities. From a supply demand perspective, it's also worth bearing in mind. We've got the market in deficits really for the foreseeable future, slightly depending this year upon what happens with investment demand. So we have seen some outflows from ETFs and those warehouse exchange stocks that I mentioned earlier that could, if we remain where we are today, push the market back towards a more balanced market. That said, going back to the earlier comment on interest rate expectations, I think the market is slightly overestimating the potential for the Fed to raise rates.

It's more likely, I think we'll see a flat environment this year. That's a personal opinion. And I think that brings a bit more support back into the precious metals complex, which I think we've kind of seen actually begin to emerge a bit this week, looking at how they're all performing. The other thing for platinum, and going back to its end uses, is there are areas where we could see fairly significant demand growth over the next couple of years. So the first one would be in hydrogen and a second order impact of the conflict in the Middle East is I think a lot of areas around the world, Europe, for example, and East Asia, they're looking at their energy security. So, I think for green hydrogen, this could be a little bit like the '70s oil crisis was for North Sea oil and gas production in Europe.

It could be a catalyst for that because you do need renewable energy, so you've got to build that first. But you can't electrify everything directly. You can't electrify using hydrogen as an energy carrier. And so that could be quite significant in terms of the outlook for that and platinum is used within the hydrogen industry. The other area is AI. So we're seeing this is actually really quite new. In fact, it's only just emerged in the last six months or so. These end users have been there. We just weren't fully aware of them. But the semiconductor, the optical crystal production, those are for the data center interconnects. These are actually potentially fairly significant end uses for PGMs and for platinum and palladium in particular that we're still trying to get to grips with them, I don't think are fully factored into people's supply demand outlooks. So there is the potential for that diversity of end users to drive demand higher than we're seeing at the moment.

Mike Maharrey: Yeah. And I think just to reiterate, this market deficit, that is a significant thing. When you're pulling less metal out of the ground than is being used, that's going to create that price pressure. As you say, people that are holding the metal, they're going to ask for a little bit more to give it up. So I think looking at both of the supply and demand dynamics, I think that's a very good point. So, I'll get you out on this one. And this is just, I'm going to ask you to speculate. And by the way, I agree completely with your assessment of the Fed. I've been saying for a long time, I don't think that they can really raise rates given the levels of debt that we see in the United States and around the world. But I mentioned that my mom loved platinum. And of course, when I was a kid in the '80s, platinum was actually more expensive than gold.

It was not the gold standard, it was the platinum standard. And you still see that interestingly. If you're a frequent flyer with Delta, their highest level is platinum. Gold is lower than platinum. Do you ever see a time when platinum regains that parity or even outpaces the gold price or is that kind of a relic of the past?

Edward Sterck: I think if you go back to as far as 1980 from then until today on average, and this is including the last few years when platinum has been at a discount to gold, platinum on average has traded at twice the gold price. Now that's partially because gold was suppressed for a long time due to the gold standard. But certainly platinum in terms of scarcity is significantly scarcer than gold. It's about 30 times less available. So, that makes intrinsically a more precious metal. And that arguably should be reflected in its pricing. I think the challenge in the near term is really one of the things you touched on earlier, which is gold is a monetary asset and platinum isn't. And so it's the kind of go-to asset. And partially because the market is bigger, it is more available. It's got greater liquidity. So, it is becoming the go-to asset for central banks who are nervous about weaponization, if you like, of the international financial markets, which are obviously dollar denominated.

The potential for that rather than actuality, I should say. And so that's really what's been driving central bank gold buying since about 2014. And it's difficult to see that necessarily changing in the current global geopolitical environment where we seem to be going from a world dominated by a strong and confident US to a more multipolar world with greater uncertainties.

Mike Maharrey: Yeah. Yeah. I think all of that is absolutely correct. Well, I really do appreciate you taking time out of your day. I know you're toward the end of your workday across the pond there, so I appreciate you working this out and getting me on your schedule. Before we go, I do want you to let folks know where they can follow the work of the World Platinum Investment Council and maybe give folks a little bit of a sense of some of the data and information that you guys provide.

Edward Sterck: Well, thank you for the opportunity. Yeah, so our website is platinuminvestment.com. We publish all of our research on there for free. So, there's usually one or two reports that come out a month. Probably our most accessible type of research is, which actually comes about much more frequently, is something called 60 Seconds in Platinum, which you can access on the website or subscribe to and it'll land in your inbox. And all of these publications are also flagged up on LinkedIn on our corporate profile page there when they're released. So, I mean, we run full supply demand analysis for everything from the automotive drivetrain to hydrogen to all of the underlying factors behind the platinum and Palladian markets. And we try to help people understand the dynamics that are impacting value expectations both now and into the future. So, it's all available there.

Mike Maharrey: Yeah, absolutely. You guys did fantastic work and I'm glad you're out there. I appreciate the data that you provide, and it helps folks like me and those listening to make sense out of maybe a sector that people aren't quite as familiar with. So, I would encourage folks to maybe take a little bit of time in the next few days, visit the website there and familiarize yourself with the market because it's a whole other world of precious metals that we can tap into. So, Edward, thanks again for taking time out of your day and for hanging out with me, and we'll definitely get you back on in the future as things continue to unfold in those markets.

Edward Sterck: Brilliant, Mike, thanks very much indeed. It's been a good chat.

Some very interesting analysis on the PGMs there and I hope you enjoyed that.

And that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. And remember to tune in as well to the Money Metals Midweek Memo, hosted by Mike Maharrey.

To check out any of our audio programs just visit https://www.moneymetals.com/podcasts";>MoneyMetals.com/podcasts or find them on Spotify, Apple Podcasts, Google Podcasts, or wherever you listen to your favorite podcasts. And as a big help to us we would ask you to please like, subscribe, download and rate our podcasts. Doing so helps us extend the reach of this material.

Until next time, this has been Mike Gleason with https://www.moneymetals.com/";>Money Metals Exchange, thanks for listening and have a wonderful weekend everybody.

What an Awful Jobs Report! And Don't Skip Over the Revisions

Fri, 07 Aug 2026 00:00:00 EST

What an awful jobs report.

And I’m not even talking about the contraction of -23,000 jobs in July.

I’m talking about the revisions.

The Bureau of Labor Statistics estimates that the economy shed 23,000 jobs last month.

Economists were expecting 83,000 new jobs in July.

Oops.

!!--Product-Random-Featured-All--!!

Interestingly, despite job losses, the unemployment rate clicked down to 4.1 percent. That’s because the labor force participation rate fell to 61.4 percent, the lowest level since the pandemic.

But in my opinion, the big story is the revisions.

They were so extreme, even the mainstream media reported on them. Typically, we never hear about the revisions (and they happen constantly).

Remember how we got those "strong" job reports in May and June?

Well, May’s job numbers were revised down by 66,000, from +129,000 to +63,000. The June job data was revised down by 37,000, from +57,000 to +20,000.

When you add it all up, the total number of jobs “created” in May and June was 103,000 lower than initially reported.

Downward Revisions Are Par for the Course

These downward revisions should come as no surprise. It happens with virtually every BLS report.

In January, the bureau made its end-of-the-year adjustment to the “birth-death model” it uses to determine job growth. That erased nearly half a million jobs from the economy. To be precise, the BLS wiped out 403,000 jobs with its model revision (At the same time, it revised December’s report down from 50,000 to 48,000 jobs).

With that revision, the U.S. economy only generated an average of 15,000 jobs per month in 2025. You probably don’t have that impression if you just saw the headlines as the BLS announced its employment data each month.

If it sounds like the agency is just making stuff up, well…

In fact, downward revisions appear to be standard operating procedure for the BLS. The agency erased nearly 1 million (911,000) jobs that it initially claimed were created between March 2024 and June 2025.

In 2023, job numbers were revised down in 10 of the 12 months.

https://www.moneymetals.com/uploads/content/2023-job-revisions.png"; width="700" height="426" class="mx-auto p-3" alt="" />

To be fair, compiling employment data is no simple task. Revisions should be expected. But why do the updates almost always remove jobs from the economy? One would think you’d see upward revisions nearly as often as downward, right?

Nope.

Between 2003 and 2024, the final annual BLS numbers were lower than the initial report 14 times compared to seven upward revisions.

https://www.moneymetals.com/uploads/content/yearly-job-revisions.png"; width="700" height="382" class="mx-auto p-3" alt="" />

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It's notable that markets typically only react to the initial numbers. You almost never see markets tank because the BLS erased a bunch of jobs from the economy with a few clicks of its calculator. The revisions happen quietly in the back alleys. Nobody pays any attention to them. That creates the illusion that the labor market is much stronger than it is.

It goes something like this:

This month, the government reports good news. Everybody celebrates. Markets move. The following month, the government quietly revises everything downward and reports that the good news was really bad news.

And nobody pays attention.

This month is a notable exception to that rule. We’re seeing the revisions emphasized. I guess you can’t hide under the cover of darkness forever.

This wouldn’t matter nearly as much if central bankers and government officials didn’t lean on this data to make decisions. But they do. And if the data is this unreliable, what does that tell you about the decisions based on this data?

Let’s be honest - when you look at the history, one’s got to wonder why anybody takes these numbers at face value.

No! We're Not Going to Get Rich Mining Asteroid Gold

Fri, 07 Aug 2026 00:00:00 EST

There is an unimaginable fortune floating between 150 and 400 million miles from Earth.

It’s an asteroid named Psyche.

Some people think we can solve global poverty by mining this space gold and other precious metals.

We can’t.

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Scientists believe this 144-mile-long floating space rock contains large amounts of metal, including gold and platinum. They estimate the asteroid could contain $10 quintillion worth of precious metals.

I don't even know what the number means. To put it into perspective, it would be enough money to pay every person on Earth $1.22 billion.

That would certainly put a dent in global poverty, eh? As a bonus, we wouldn't have to hate billionaires anymore. We'd all be one!

Of course, the amount of gold on Psyche is purely speculation.

https://science.nasa.gov/solar-system/asteroids/16-psyche/"; target="_blank" rel="noopener">According to NASA, “The best analysis indicates that Psyche is likely made of a mixture of rock and metal, with metal composing 30 percent to 60 percent of its volume. The asteroid’s composition has been determined by radar observations and by the measurements of the asteroid’s thermal inertia (how quickly an object gains or re-radiates heat).”

Even without knowing Psyche’s exact composition, it’s fun to speculate about how much gold might be there.

Scientists estimate Psyche's mass is roughly 2.3 × 10¹⁹ kg. Let's say gold constitutes just 10 parts per million (purely speculative); that would amount to about 230 billion metric tonnes of gold. That's roughly a million times more than all the https://www.moneymetals.com/news/2026/03/31/just-how-much-gold-is-there-004800";>gold mined in human history.

A Fool's Errand

Every so often, people talk about mining Psyche and similar asteroids. It sounds like a great plan. I mean, if there’s that much gold and other precious metals in the asteroid, it certainly seems like something worth looking into, right?

Or maybe not.

From a practical standpoint, we're capable of reaching the asteroid. In fact, NASA launched a mission to Psyche in 2023. The unmanned craft is expected to reach Psyche in 2029.

We also have the ability to dig for gold in space.

However, from an economic standpoint, trying to pull gold out of a space rock is a fool’s errand.

That hasn’t stopped people from trying.

In 2010, Planetary Resources and Deep Space Industries combined forces to mine asteroids. They secured some high-profile financing from the likes of Google’s Larry Page and Eric Schmidt.

It wasn’t enough.

Within a decade, the companies had been absorbed by other organizations that had nothing to do with asteroid mining.

As Lachlan Brown, https://spacedaily.com/t-asteroid-mining-gets-sold-as-a-trillion-dollar-gold-rush-but-the-economics-point-the-other-way-hauling-platinum-back-to-earth-would-crash-its-price-so-the-only-prize-that-adds-up-is-mining-water-and/"; target="_blank" rel="noopener">writing for Space Daily, put it, it wasn’t that the precious metals weren’t there.

“[The lesson] was that the timelines are long, the capital required is vast, and investors ran out of patience long before anyone reached an asteroid.”

!!--Product-Random-Best-2--!!

That isn’t stopping TransAstra Corporation from pursuing intergalactic mining. However, CEO Joel Sercel told CNBC the mining of precious metals on asteroids simply isn’t economically viable.

“If we had to develop a full-scale asteroid mining vehicle today, we would need a few hundred million dollars to do that using commercial processes. It would be difficult to convince the investment community that that’s the right thing to do. In today’s economics and in the economics of the near future, the next few years, it makes no sense to go after precious metals in asteroids. And the reason is the cost of getting to and from the asteroids is so high that it vastly outstrips the value of anything that you’d harness from the asteroids.”

The company will focus on mining water from asteroids to make rocket propellant in space. This would allow rockets to refuel en route and allow rockets to launch from Earth carrying much less heavy fuel.

Of course, technology is advancing daily. Gold mining in space isn’t out of the question in the future.

So, can we count on a future with an unlimited supply of gold and riches for all?

Even if we could, I’ve got bad news.

All of that gold wouldn’t be worth much.

One of the things that makes gold valuable is its scarcity. If somebody drug thousand of tonnes of gold back to Earth, it would be worth about as much as a bag of mulch – if that.

Brown explained why reading basing a business plan on “$10 quintillion” in gold on a space rock is a fool’s errand.

“The first is that the number assumes you could deliver all that metal to Earth at no cost, when the delivery is the entire problem. The second is more fundamental: if you actually did land that much platinum or gold, you would flood the market and collapse the price of the thing you came to sell. The markets for precious metals are small by weight, and they do not have room to absorb asteroid-scale quantities without the value evaporating.”

So, the next time somebody tells you we’re going to eliminate poverty one day by giving everybody on Earth a bunch of space gold, you can explain to them why they’re living in a fantasy world.

As Brown summed it up, “The case for asteroid mining is real, but almost nothing like the version that gets sold.”

Surging Asian Gold Demand Could Signal a "Structural Wealth Shift"

Fri, 07 Aug 2026 00:00:00 EST

Asian banks have beefed up their gold product and service offerings in recent months. According to The Banker, this represents “a structural wealth shift in wealth allocation.”

New products and innovations introduced in the Asian gold market run the gamut from investing platforms that offer fractionalized gold investment, to new ETF offerings, to expanded vaulting capacity.

For instance, DBS in Singapore now offers fractionalized gold trading on a retail app. On this platform, investors can purchase tokens backed by as little as 1 gram of gold.

!!--Product-Random-Best-2--!!

Meanwhile, HSBC recently announced plans to increase its gold storage capacity in Hong Kong to 200 tonnes. According to official sources, HSBC isn’t alone. Officials say they plan to increase gold storage capacity in the Chinese special administrative region by around 2,000 tonnes over the next three years.

There has also been a major surge in the number of gold-backed ETFs offered in Asia. The region saw the highest https://www.moneymetals.com/news/2026/08/06/gold-flows-into-etfs-flipped-positive-in-july-as-investors-buy-the-dip-005117";>ETF gold inflows of any region through the first half of the year, with Asian-based ETFs accumulating over 74 tonnes of gold. With a value of $12 billion, Asian ETF gold inflows set an H1 record.

Perhaps the most significant development in the Asian gold market was the launch of a https://www.moneymetals.com/news/2026/07/09/hong-kong-launches-gold-settlement-system-to-challenge-western-dominance-005050";>new Hong Kong-based gold clearing and settlement system that could begin to move the center of gold trade from London and the West to China and the East.

Standard Chartered global head of sales and structuring called this “a fundamental structural shift in wealth allocation,” evidenced by rising demand for gold from central banks, institutional investors, and retail consumers.

While the recent run-up in the gold price has contributed to these developments in the Asian gold market, KPMG China head of banking and capital markets in Hong Kong, Jia Ning Song, told The Banker that this buildout isn’t just a response to a temporary bull market.

“Nobody constructs vaulting capacity, clearing memberships and tokenization platforms — multiyear, capital-intensive commitments — to monetize a 12-month rally. The investments now being made in Hong Kong’s gold ecosystem are geared towards conviction in multi-decade demand.”

!!--Product-Random-Featured-2--!!

Song said nearshoring investments appeal to Asian investors. Setting up local clearing venues allows banks to quote and settle gold during Asian trading hours rather than routing transactions through London and dealing with significant time zone differences.

“As credit risks become more topical, gold’s minimal counterparty risk is proving especially attractive. We anticipate the trend of nearshoring gold holdings into Asia will intensify.”

Song called gold “a fiat hedge” as weakening faith in paper currencies, particularly the dollar, has driven Asian portfolio diversification. He specifically noted the growing levels of global debt, which reached a record of $353 trillion in Q1.

World Gold Council head of Asia-Pacific Shaokai Fan said Asia has the potential to become “a global gold hub.” He said he expects growing demand for vaulting, clearing and settlement in Singapore, Hong Kong, and Shanghai.

Asia already accounts for about 60 percent of global consumer gold demand. In fact, Western investors largely sat out the bull run last year, only jumping on the bandwagon last fall. When Western investors begin to understand the dynamics driving Asian investors, they may well join the party.

We're already seeing signs that Western investors are starting to follow Asia's lead. Last year, Morgan Stanley CIO Michael Wilson https://www.moneymetals.com/news/2025/10/07/seismic-shift-morgan-stanley-recommends-602020-portfolio-with-20-allocated-to-gold-004389";>suggested a switch to a 60/20/20 strategy, swapping half of the bond portfolio for gold to serve as a “more resilient” inflation hedge.

Given that most Western investors have little to no exposure to gold, even a modest increase in gold allocation could send prices soaring higher.

Gold Price During a Recession - Gold vs. the S&P 500 in Every Recession Since 1971 - The 2008 Margin-Call Drop and Four Forces Driving Gold - Money Metals

Thu, 06 Aug 2026 00:00:00 EST

The https://www.moneymetals.com/gold-price";>gold price during a recession has usually gone up. In the 1973–75 downturn, gold rose 83% while stocks fell 18%. In 2020, gold finished the year up about 25% higher than it was prior to the COVID lockdowns.

But the record is not perfect. In 2008, gold dropped nearly 30% before it recovered. That drop caught many investors off guard. It also taught a lesson worth knowing.

We will explore how gold has performed in all the major recessions since 1971. By the end, you will understand why gold usually rises when the economy falls … and what really happened in 2008.

Does the Gold Price Go Up During a Recession?

Gold typically goes up during a recession. Gold has risen in six of the seven U.S. recessions since 1971.

There are some caveats to this. First, gold does not rise in every recession. It is also worth noting that it does not rise in a straight line.

Nevertheless, the pattern holds. Investors tend to move money into gold when the economy shrinks.

You may wonder why we're starting the count at 1971. There is a simple answer.

Before that year, the question has no real answer. The U.S. government fixed the gold price at $35 an ounce. The price could not move. President Nixon cut the dollar's tie to gold in August 1971. Only then did https://www.moneymetals.com/price/who-sets-the-gold-price";>the market set the price.

This is a crucial factor to note, even if it may sound unnecessarily technical. Other sites claim gold gained in six of eight recessions since 1970. That count includes the 1969–70 downturn, when the law still froze the price. In that instance, gold did not gain in any real sense. It just sat where the government put it.

One more note on the numbers. Different sources measure different windows. Some track gold from the first day of a recession to the last. Others measure six months before the start to six months after the end. The window changes the result. We use the official dates from the https://www.nber.org/";>National Bureau of Economic Research.

So the honest record starts in 1971. Since then, gold has gained during recessions more often than not. Some gains were large, while others were more modest. Notably, 2008 saw a significant collapse in the gold price before it rose again.

The next section shows the numbers for each recession, side by side with stocks.

Gold Prices in Every Recession Since 1971

Here is gold's price in each U.S. recession since 1971. We use the official start and end dates from the National Bureau of Economic Research. We measure gold from the first month to the last. No cherry-picked windows.

Gold vs. the S&P 500 in every U.S. recession since 1971

Recession (NBER)	Gold at start	Gold at end	Gold change	S&P 500 change
Nov 1973–Mar 1975	$97	$178	+83%	−18%
Jan 1980–Jul 1980	$675	$614	−9%	+13%
Jul 1981–Nov 1982	$409	$415	+1%	+7%
Jul 1990–Mar 1991	$362	$364	+1%	+3%
Mar 2001–Nov 2001	$263	$276	+5%	−4%
Dec 2007–Jun 2009	$803	$946	+18%	−36%
Feb 2020–Apr 2020	$1,597	$1,683	+5%	−10%

Recession start and end dates are the official peak and trough months published by the National Bureau of Economic Research. Gold prices are the https://www.moneymetals.com/price/who-sets-the-gold-price";>London fix monthly average for those months. Prices are nominal and not adjusted for inflation. Past performance does not predict future results.

What 2008 Actually Teaches Investors

Gold peaked near $1,000 an ounce in March 2008. Then it slid down throughout much of the spring and summer. By mid-September, days after Lehman Brothers collapsed, gold traded at $692.50.

That represented a drop of about 30 percent from the peak. Stocks were falling hard at the same time. For a few weeks, gold looked as though it had failed at the one job people expected it to perform.

Then it turned around. Gold recovered most of its losses before the year closed. It crossed $1,000 again in early 2009 while stocks continued to decline. By September 2011, gold traded above $1,900.

So why did gold fall in the middle of a panic?

The answer is margin calls, not lost faith in gold. When markets crash, investors who borrowed to buy get a call from their broker. They have to raise cash within days. They cannot sell what no one wants to buy.

So they sell what they can, and gold sells easily. Funds dumped gold in the fall of 2008 to cover losses somewhere else entirely.

That distinction matters. A forced sale is not a judgment on an asset. It is a cash problem at a firm that happens to own it.

Two lessons come out of this.

First, gold's worst stretch in 2008 lasted weeks, not years. Anyone who sold near the bottom locked in the loss. Anyone who waited watched it reverse.

Second, plan on seeing it again. The same mechanism is likely to repeat in the next severe crisis. A sharp early drop in gold is a normal feature of a liquidity panic. It is not proof that the case for gold has broken.

Why Gold Tends to Rise When the Economy Contracts

We have shown what happens to gold in a recession by using historical data. Now, let's talk about why these trends play out. Four forces do most of the work in changing gold's price, and they do not always pull in the same direction.

Safe-Haven Demand

When stocks fall, money looks for shelter. Gold provides something that many other financial assets cannot: no counterparty risk.

Stocks can fall drastically if a company fails. Something that was once worth hundreds or thousands could be worth nothing in a single bad turn. Likewise, a bond can default if the borrower cannot pay. Bank deposits depend upon the bank.

Gold, on the other hand, is simply gold. Its value is intrinsic, and it does not rely on anyone's promise to retain that value. That's why many investors buy gold in times of economic uncertainty.

Falling Interest Rates and Real Yields

This is the strongest driver, and it works like a seesaw.

Unlike stocks, bonds, or bank deposits, gold does not pay interest. Spending money on gold requires you to give up funds that could generate yields if invested elsewhere.

However, central banks almost always cut rates during a recession. What matters in these instances is the real rate, which is the interest rate you actually gain after inflation. When real rates drop, the https://www.moneymetals.com/price/gold-spot-price-vs-futures";>cost of holding gold drops too.

In that scenario, gold usually rises. The reverse also holds. In 1980 and 1981, gold fell as real rates soared.

Currency Debasement and Stimulus

Recessions bring increased spending, and it comes from several fronts. Governments send checks. Central banks buy bonds and expand the money supply.

The trouble is that more dollars chase the same goods. Each dollar buys a little less because of the decline.

Gold works differently. Mine supply grows by only one to two percent a year. No one can print more gold like they can paper money. That gap is why gold and inflation tend to move together over long periods.

Central Bank Buying

This force is relatively new in the history of gold. For most of the 1990s, central banks were net sellers of gold, rather than buyers.

This trend changed in 2010. That year, they transitioned to being steady net buyers of gold. In recent years, central bank gold buying has hit record levels. In 2025 alone, central banks bought a total of https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-full-year-2025";>863.3 metric tons of gold. That figure was down 21% from 2024.

That demand does not switch off during economic downturns. This is a significant development, as it gives gold a floor that did not exist in previous recessions.

These four forces typically work together. Sometimes, they play against each other. In 1980, high real rates beat safe-haven demand and gold fell. In 2020, every force pushed the same way and gold set records. Reading which force is strongest tells you more than the word recession does.

Gold vs. Stocks and Other Recession Assets

No asset wins every recession. However, gold has done fairly well when compared to the usual alternatives.

Stocks are the most obvious example. These fall in most economic downturns, as demonstrated in the table above. There, the data records the S&P 500 dropping in four of the seven recessions since 1971. Over long stretches, stocks have beaten gold. However, their worst losses tend to occur at the worst moments, when jobs and salaries are also at risk.

Bonds are gold's toughest competitor. Rate cuts push bond prices up, and Treasuries held their value well in 2008. Bonds have one clear weakness. They lose ground when inflation runs high. You can see that trend borne out in the 1970s and in 2022.

Cash often feels safe and steady because it is a stable, legal tender asset. However, the catch for cash is purchasing power. A dollar held through a decade of inflation buys noticeably less at the end of it.

Real estate is slow to sell. In 2007, it was also the source of the crisis rather than a shelter from it.

Gold has a real drawback worth naming. It pays no dividend, no interest, and no rent. You can only gain if the price rises. However, in exchange, you hold an asset that cannot default and does not depend on anyone else keeping a promise.

So what is the best investment during a recession? There is not a single answer. The type of downturn plays a major role in this decision. Bonds tend to do well when inflation is falling. Gold tends to do well when it is not.

Mining stocks are a separate question. They track gold loosely, but they also carry company risk that physical metal does not. They can have exponentially higher growth, but the downside is that they can also have exponentially sharper falls. Experienced investors may choose to invest in mining stocks, but newcomers should strongly consider consulting a financial advisor beforehand.

What This Means for Investors Today

No one knows when the next recession will start. History is an unpredictable affair, and economies do not rise and fall on a clear schedule. However, the data above demonstrates a few key principles.

Timing has usually mattered more than a recession itself. Most of gold's recession gains went to people who already owned gold. Buying it after the recession headline arrives usually means paying more for the metal. https://www.moneymetals.com/price/gold-premium";>Gold premiums over spot tend to widen in cases of demand spikes, so the total cost rises twice.

The 1980 lesson continues to hold. Gold has reached significant highs in recent years, and that higher starting price changes the math. It does not rule out further gains. However, it does mean that reaching further gains can be significantly more challenging.

The form of gold you hold matters too. Fund and futures track the gold price, but they still depend on a counterparty. Much of gold's recession case rests on the fact that physical metal does not. If that is the reason for owning gold, the type of ownership is part of the reason.

Steady buying removes the timing problem. Buying a fixed dollar amount each month means you buy more ounces when prices dip and fewer when they climb. You never have to guess the top or the bottom.

None of this is a forecast, and none of it is investment advice. It is what the last seven recessions show. What you do with it depends on your own situation, your time frame, and what the rest of your savings look like.

Frequently Asked Questions

Gold usually goes up during a recession, but it is not always the case. Gold rose in most U.S. recessions since 1971 and fell during the 1980 downturn. The outcome depends on real interest rates, inflation, and how severe the crisis becomes. A recession by itself does not guarantee a higher gold price.

Gold peaked near $1,000 in March 2008, then fell to about $692 after Lehman Brothers collapsed that September. It ended the year close to where it started and passed $1,900 by 2011. The drop occurred because of a cash squeeze, not a failure of gold.

Gold has had sharp drops inside recessions, but no lasting crash. The 2008 slide of roughly 30 percent is the clearest case, and it reversed within months. Forced selling drives these dips. Investors facing margin calls sell whatever they can, and gold is easy to sell.

Gold and stocks often move apart, which is why many investors hold both. In 2008, stocks lost more than a third of their value while gold gained. In the first days of a crash, though, gold can fall too as traders scramble for cash. The gap tends to open later.

Gold averaged about $604 an ounce in 2006. That $10,000 would have bought roughly 16.5 ounces. Assuming the closing spot price of July 2026, which came in at $4,042.67, those ounces would be worth about $66,700. That is close to seven times the original amount, before storage or dealer costs.

That is a personal decision, and this is not investment advice. What the record shows is that most recession gains went to people who already held gold. Premiums over spot also tend to rise when demand spikes. Waiting for the headlines has usually meant paying more for the same ounce.

Conclusion

Gold has risen in most U.S. recessions since 1971, but not in all of them. The 1980 downturn showed that a high starting price can cap the upside.

The 2008 panic showed that gold can fall hard before it recovers. Neither case broke the longer pattern. Real interest rates, inflation, and the depth of the crisis decide the outcome, not the word recession.

You can check today's gold price and current premiums any time. https://www.moneymetals.com/programs/monthly-program";>Buying a set amount each month also spares you from guessing what comes next.

Precious Metals Sector Major New Uptrend Alert

Thu, 06 Aug 2026 00:00:00 EST

Various factors are converging, which suggest that the Precious Metals sector is about to break out into a major new uptrend, and it looks like we have waited long enough.

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One factor that has deterred us somewhat has been the lurking threat of a market crash or severe downturn in the market generally, but it looks like they are going to continue to stave this off with massive money creation, with the latest madcap idea being to gift Iran US$300 million for reconstruction if it does what they want it to.

Of course it doesn’t have to and won’t, but it gives you an idea of how desperate they are to create money out of thin air.

We’ll now look at a range of silver charts to see why a breakout into a major new uptrend is a fast-growing probability.

Starting with a 1-year chart, we can see that the correction to the preceding parabolic blowoff looks like it has run far enough, with it converging and thus being a bullish Falling Wedge, and it having brought the price back to strong support at the upper boundary of the https://www.moneymetals.com/silver-price";>giant 45-year Cup & Handle holding pattern that we will look at later on its very long-term chart.

With it now below a still rising 200-day moving average and momentum (MACD) improving, it looks like a good time for it to start higher again, especially given that we have entered a seasonally positive time of year for the Precious Metals.

https://www.moneymetals.com/uploads/content/Chart-1-silver1year030826--1-.jpg"; width="800" height="841" class="mx-auto p-3" alt="" />

Now we’ll look at the same 1-year chart but this time with Bollinger Bands and Stochastics appended. Notice how the Bollinger Bands are pinched very tightly together – the last time this happened during the life of this chart was a year ago, and look what happened after that. In addition, the Stochastic is trending higher, increasing the chances of an upside breakout…

https://www.moneymetals.com/uploads/content/Chart-2-silver1year030826boll--1-.jpg"; width="800" height="847" class="mx-auto p-3" alt="" />

On https://www.moneymetals.com/silver-price";>the 5-year chart we can see that we are back in buying territory with the price having reacted back into a zone of very strong support underpinned by the lower parabolic uptrend coming into play beneath. And an important point to note is that, given the strength of silver’s big breakout last Fall, it’s asking a bit much to expect it to dig deep into this support before it takes off higher again.

It could take off very soon or even immediately – so we’d better not be backward in coming forward to buy the better PM stocks…

https://www.moneymetals.com/uploads/content/Chart-3-silver5year030826b--1-.jpg"; width="800" height="839" class="mx-auto p-3" alt="" />

Now we come to our favorite chart of all time – the chart which makes clear in no uncertain terms the incredibly bullish case for silver from a technical standpoint. Last Fall silver had a powerful breakout from a gigantic 45-year Cup & Handle holding pattern, and what we have seen since is a perfectly normal post-breakout reaction back to strong support at the upper boundary of the pattern that should birth a big 2nd upleg.

And because the next upleg should get it well clear of the pattern, it is likely to be much bigger than what we saw last year. It would be almost unheard of for the price to slump back into this pattern after the sort of clear breakout from it that we witnessed last year.

https://www.moneymetals.com/uploads/content/Chart-4-silverfrom1980at030826--1-.jpg"; width="800" height="986" class="mx-auto p-3" alt="" />

For the sake of completeness, we really ought to look at gold for the same time period, so here’s a chart for gold that also goes back to 1980 (made on the 4th and added the next day on the morning of the 5th)…

https://www.moneymetals.com/uploads/content/Chart-5-goldfrom1980at040826--1-.jpg"; width="800" height="983" class="mx-auto p-3" alt="" />

And here is a 20-month chart for GDX also (made on the 4th and added on the 5th), which also looks most propitious…

https://www.moneymetals.com/uploads/content/Chart-6-gdx20month040826--1-.jpg"; width="800" height="1003" class="mx-auto p-3" alt="" />

Lastly, the Gold Miners Bullish % index showing a low reading of 21.6% bullish means that there is certainly plenty of room for the sector to run from here…

https://www.moneymetals.com/uploads/content/Chart-7-bpgdm1year030826--1-.jpg"; width="800" height="843" class="mx-auto p-3" alt="" />

In light of these observations, we will of course be looking at https://www.moneymetals.com/news/2026/08/01/frank-e-holmes-why-the-gold-bull-market-is-far-from-over-005105";>a range of better gold and silver stocks going forward, but as it takes time to prepare such articles, you don’t have to hang around waiting for me to post them. If you go back on the site, you will be able to unearth the articles about the good ones we looked at in the past, and most of them will still be good. This article was originally published on https://www.clivemaund.com/article.php?id=7232"; rel="nofollow noopener" target="_blank">August 4, 2026.

Gold Flows Into ETFs Flipped Positive in July as Investors Buy the Dip

Thu, 06 Aug 2026 00:00:00 EST

Gold flows into ETFs flipped positive globally in July. After two consecutive months of outflows, every region reported positive flows of metal into gold-backed funds in July.

With Europe leading the way, gold ETFs reported net gold inflows of 23.5 tonnes in July, valued at $3 billion.

Assets under management (AUM) by gold-backed funds rose 1 percent to $530 billion. ETFs currently hold 4,068 tonnes of the yellow metal.

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Year-to-date, ETFs have added a net 39 tonnes of gold to their collective holdings valued at $11 billion.

The World Gold Council pinpointed three factors driving the ETF turnaround in July:

Diversification amid tech volatility
Selective bargain hunting as prices fell
Policy and geopolitical uncertainty, particularly an unclear monetary policy outlook and the ongoing war in Iran

European ETFs reported the second-strongest month of inflows this year in July, adding 17.3 tonnes of gold valued at around $2 billion.

Funds based in the UK and Switzerland led the surge.

According to the World Gold Council, it appears investors in Europe “rebuilt their positions” following a big selloff in June, as lower prices created buying opportunities.

“This mirrors the pattern seen earlier in the year, when European funds led the rebound following March's sharp U.S.-led outflows, suggesting investors were willing to add exposure after periods of market weakness.”

Asian funds reported a 4.8-tonne increase in gold holdings valued at $116 million. Chinese funds led the way with investors seeking a safe haven.

The CSI 300 Stock Index recorded its worst month since January 2016. Meanwhile, falling local yields reduced the opportunity cost of holding gold.

Japanese-listed funds reported outflows as rising local yields diverted investor demand.

Indian funds reported modest inflows of $157 million.

North American funds reported inflows of just 0.3 tonnes valued at $71 million. The World Gold Council called it a “tentative recovery” after two months of significant outflows.

North America remains the only region reporting net gold outflows for the year.

Funds in other regions, including Africa and Australia, reported gold inflows of 1 tonne valued at $140 million. ETFs listed in South Africa and Australia led the way.

ETFs are a convenient way for investors to play the gold market, but https://youtu.be/7aP6VbgXVeM?si=O3yPeFkTYFHOXrHe"; target="_blank" rel="noopener">owning ETF shares is not the same as holding physical gold.

ETFs are relatively liquid. You can buy or sell an ETF with a couple of mouse clicks. You don’t have to worry about transporting or storing metal. In a nutshell, it allows investors to play the gold market without buying full ounces of metal at the spot price.

Since you are just buying a number in a computer, you can easily trade your ETF shares for another stock or cash whenever you want, even multiple times on the same day. Many speculative investors take advantage of this liquidity.

But while a gold ETF is a convenient way to play gold's price, you don’t possess any gold. You have paper. And you don’t know for sure that the fund has all the gold either, especially when it sees inflows. In such a scenario, there have been difficulties or delays in obtaining physical metal.

Trading Volumes

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Global market liquidity averaged $356 billion per day in July, down 3.5 percent month-on-month.

Over-the-counter trading volumes also fell, ticking lower by about 3.4 percent to $205 billion per day.

Despite the decline, both LBMA volumes and Shanghai trading activity remained above their 2025 averages.

Total COMEX longs dropped modestly by 4.4 percent to 542 tonnes.

Managed money appears to be rebuilding its position, with longs adding 11 tonnes.

The World Gold Council described the current position as “near neutral.”

“Gold continues to be weighed down by the effects of the war in the Middle East, which has reinforced inflation risks and supported the dollar and yields, adding to the opportunity-cost headwind facing gold.”

South Korea Announces Gold Reserve Expansion Through Domestic Buying Program

Thu, 06 Aug 2026 00:00:00 EST

Central bank gold buying has surged in recent years. Net central bank gold purchases rose from an average of 473 tonnes between 2010 and 2021 to nearly 1,000 tonnes over the last four years.

Emerging market central banks have dominated gold buying, driving the surge in gold reserves, but a developed economy central bank recently announced plans to begin expanding its gold reserves through a domestic buying program.

On Monday, the Bank of Korea said it has established a framework to purchase gold from South Korean miners at international spot prices.

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The last time the Bank of Korea expanded its gold reserves was 13 years ago. The country currently holds just over 104 tonnes of gold, making up about 1.1 percent of the country’s total reserves.

Bank of Korea Reserve Management Group head Jeong Hee-sup said the central bank has also started purchasing gold ETF shares.

"With geopolitical risks becoming a persistent feature of the global environment, interest in gold as a safe-haven asset has grown significantly among central banks," Hee-sup said.

He emphasized that the domestic gold purchases are part of a long-term strategy to expand the country’s gold reserves.

"We do not plan to make a large purchase all at once. We intend to gradually increase the share of gold according to medium- and long-term needs."

The Korea Exchange and the Korea Securities Depository will facilitate the transactions, with domestic gold producer LS MnM and Korea Zinc supplying eligible gold.

The two Korean gold miners produce 4 to 5 tonnes of gold annually. Officials say the Bank of Korea will purchase some of that output “when market and reserve management conditions are favorable.”

The structure of the scheme will allow the Bank of Korea to settle the transactions in Korean won, meaning it will not have to dip into its foreign exchange reserves.

The gold will reportedly be stored in South Korea. Most of the country’s gold reserves are held in London vaults.

Analysts say that the move won’t likely impact the domestic gold price because the central bank plans to only buy gold intended for export at contract prices. However, it will mean less gold flowing into the global supply.

Central banks have been buying gold to lower their exposure to the U.S. dollar. Many countries have become wary of the https://www.moneymetals.com/news/2024/02/29/could-weaponization-of-the-dollar-as-a-foreign-policy-billy-club-accelerate-de-dollarization-003013";>U.S.’s weaponization of the currency and the https://www.moneymetals.com/news/2026/07/16/us-government-runs-another-big-deficit-in-june-as-interest-expense-climbs-005073";>fiscal irresponsibility of the federal government with its borrowing and spending out of control. During a central bank panel discussion in London last month, Hee-sup indicated that these concerns are top of mind in South Korea as well.

“Given gold's role as an inflation hedge and its potential as an alternative to the U.S. dollar, it's evident that gold should be considered one of the viable assets from a medium- to long-term perspective.”

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Notably, South Korea holds far less gold than most developed economies. It was aggressively expanding its reserves between 2011 and 2013. As the Economic Times of India put it, “the timing appeared disastrous.”

The yellow metal peaked at $1,920 per ounce in September 2011, and then tumbled to $1,180 in 2013, a 38 percent decline. By 2015, the unrealized loss grew to 1.8 trillion won. The South Korean government and central bank faced heavy criticism for making a bad investment decision and ended its purchasing program in 2015.

At $4,000 an ounce per day, the decision looks pretty good. The 90 tonnes of gold purchased during that period are now worth about $7 billion more than the Bank of Korea paid for it.

As already noted, South Korea is part of a broader central bank gold buying trend.

Last year was the fourth-largest expansion of central bank gold reserves on record, at 863 tonnes. That was down 21 percent year-on-year, but still well above the 2010-2021 annual average of 473 tonnes.

The all-time high was set in 2022 (1,136 tonnes). It was the highest level of net purchases on record, dating back to 1950, including since the suspension of dollar convertibility into gold in 1971.

Last month, the European Central Bank confirmed that https://www.moneymetals.com/news/2026/06/02/ecb-confirms-gold-has-overtaken-treasuries-as-top-global-reserve-asset-004959";>gold had overtaken U.S. Treasuries as the world’s top reserve asset.

According to an Official Monetary and Financial Institutions Forum (OMFIF) report, this shift toward gold has been “driven by protection against geopolitical risk and growing doubts about the stability of the international monetary system.”

OMFIF head of research Andrea Correa said she thinks this trend will continue into the foreseeable future.

"Gold is not moving anywhere. Reserve managers of the central banks are still very bullish on gold. Despite the fact that the gold value itself keeps rising, they are still demanding it."

Markets Question Fed's Inflation Resolve After July FOMC Meeting

Thu, 06 Aug 2026 00:00:00 EST

Federal Reserve Chairman https://share.google/jKuVxYtOXrl7jQMAH"; target="_blank" rel="noopener">Kevin Warsh continues to project a tough stance on inflation, repeatedly promising to restore price stability and keep inflation anchored at the central bank's longstanding 2% target. But according to Mike Maharrey in this week's Money Metals Midweek Memo, markets are beginning to judge the Fed by its actions rather than its rhetoric—and so far, they aren't convinced.

Drawing on the old adage "less talk and more action," Maharrey argues that while Warsh has made forceful public statements about fighting inflation, the Federal Reserve has yet to take any meaningful policy steps to support those promises. That disconnect, he says, is beginning to influence bond markets and could ultimately strengthen the case for owning precious metals.

https://www.youtube.com/embed/fCVHRAJdE14?si=ocY6_hHYhGtCyCvg"; title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="allowfullscreen">

Fed Holds Rates Steady Despite Internal Division

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The Federal Open Market Committee (FOMC) concluded its July meeting by leaving the federal funds rate unchanged at 3.50% to 3.75%. Although the decision was widely anticipated, it marked the second meeting under Chairman Kevin Warsh and featured the first significant public disagreement within the committee.

Three policymakers—Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan—voted in favor of a 25-basis-point rate hike, while the remaining nine members voted to keep rates unchanged. Warsh characterized the debate as a "good family fight," emphasizing open discussion https://www.moneymetals.com/news/2026/07/30/interest-rates-unchanged-after-fed-family-fight-005100";>rather than unanimous agreement.

Despite the divided vote, Maharrey contends that the practical outcome remained the same: the Fed continued talking aggressively about inflation without actually tightening monetary policy.

A New Communication Strategy Leaves Markets Guessing

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One of Warsh's biggest departures from former Chairman Jerome Powell is his rejection of extensive forward guidance.

Under Powell, markets typically had a clear idea of the Fed's intentions well before policy meetings. Warsh has intentionally abandoned that approach, shortening official FOMC statements from more than 300 words under Powell to roughly 130 words, arguing that policymakers should provide facts rather than forecasts.

Maharrey notes that while less guidance may give the Fed greater flexibility, it also creates greater uncertainty. Investors inevitably attempt to anticipate future policy, and when official guidance is sparse, markets become more volatile as participants fill in the blanks themselves.

Some economists have already criticized the new approach. Capital Economics argued that Warsh's intentionally vague answers have made forecasting future Fed actions even more difficult.

Tough Inflation Talk Without Tough Inflation Policy

Throughout his press conference, Warsh repeatedly pledged that the Federal Reserve would restore price stability, insisting, "We will deliver price stability," while acknowledging the process would take time and describing the July meeting as only "the beginning of the story."

Maharrey, however, argues that those assurances ring hollow because the Fed has not raised interest rates at all under Warsh.

He contrasts today's Fed with former Chairman Paul Volcker, who famously pushed interest rates to nearly 20% in 1980 to break inflation. By comparison, Maharrey says Warsh's inflation-fighting credentials remain untested because no comparable policy action has accompanied the rhetoric.

Bond Markets Signal Growing Skepticism

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Perhaps the strongest evidence that investors doubt the https://www.moneymetals.com/news/2026/07/28/with-bonds-struggling-investors-turning-to-tangible-assets-like-gold-005096";>Fed's resolve came from the Treasury market following the July meeting.

Instead of falling, longer-term Treasury yields climbed. The 10-year Treasury yield rose 5 basis points to 4.657%, while the 30-year Treasury yield jumped 9 basis points to 5.193%. Maharrey interprets this move as a sign that investors increasingly believe the Fed is finished raising rates even though inflation risks remain elevated.

Reuters described the shift as reflecting expectations for persistent inflation rather than additional Fed tightening.

Former Federal Reserve economist Nathan Sheets, now Global Chief Economist at Citi, argued that markets are effectively casting a vote of no confidence in the Fed's inflation strategy. According to Sheets, Warsh has identified the inflation problem without presenting a credible roadmap for solving it, while also facing political pressure from the White House, which has favored lower interest rates.

Balance Sheet Expansion Sends Mixed Signals

Maharrey also points to another contradiction in the Fed's messaging.

While officials https://www.moneymetals.com/news/2026/08/02/yield-curve-twist-reveals-markets-losing-confidence-in-feds-commitment-to-slaying-inflation-005106";>speak aggressively about controlling inflation, the Federal Reserve has continued expanding its balance sheet through bond purchases—effectively engaging in quantitative easing. He argues that these purchases help support Treasury markets at a time when demand for U.S. government debt has weakened, and federal borrowing continues to expand by hundreds of billions of dollars each month.

According to Maharrey, buying government bonds while simultaneously claiming to wage war on inflation sends conflicting signals and further undermines the Fed's credibility.

Could the Fed Redefine Inflation?

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Another concern raised during the episode involves how the Federal Reserve measures inflation itself.

Historically, the Fed has targeted https://www.moneymetals.com/news/2026/08/04/what-is-the-pce-and-why-is-it-the-feds-favorite-inflation-gauge-005110";>2% core Personal Consumption Expenditures (PCE) inflation. During his confirmation process, Warsh expressed interest in using trimmed averages, which exclude both the highest and lowest price changes in an effort to smooth inflation readings.

Although Warsh stated that PCE remains the Fed's preferred measure for now, he also suggested that task forces reviewing Fed strategy could recommend changes after January.

Maharrey argues that altering the methodology rather than lowering inflation itself would amount to moving the goalposts, allowing policymakers to claim success without materially reducing inflation.

Implications for Gold and Silver

Maharrey believes precious metals have spent the past several months trading sideways largely because investors expected the Fed to keep interest rates higher for longer.

Gold has found support around $4,000 per ounce, recently rebounding toward $4,200 amid optimism surrounding the Strait of Hormuz reopening and weaker-than-expected employment data.

If markets continue losing confidence in the Fed's willingness or ability to control inflation, Maharrey argues the environment could become increasingly supportive for both gold and silver through expectations of higher inflation, https://www.moneymetals.com/news/2026/08/02/de-dollarization-alert-china-set-to-launch-alternative-global-payment-system-005107";>a potentially weaker U.S. dollar, and eventual monetary easing if economic conditions deteriorate.

Why Real Interest Rates Matter

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A key part of Maharrey's analysis centers on real interest rates, which subtract inflation from nominal yields.

Using current figures, he notes that with the federal funds rate at 3.5% and CPI inflation also at 3.5%, the real policy rate is effectively 0%. If inflation rises even modestly, real interest rates become negative despite positive nominal yields.

Because gold earns no yield, critics often argue that higher interest rates are bearish for precious metals. Maharrey counters that what truly matters is purchasing power. If inflation consumes all of an investor's nominal return, the opportunity cost of holding gold becomes far less significant.

Inflation Metrics and the Case for Sound Money

The episode concludes with a discussion of inflation measurement.

Maharrey explains the distinction between the https://www.moneymetals.com/news/2026/07/28/inflation-pain-is-worse-than-the-cpi-indicates-005097";>Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) index, noting that the Fed prefers PCE because of methodological differences that generally produce lower inflation readings. He argues that neither index measures inflation in its classical sense, which he defines as expansion of the money supply rather than rising consumer prices alone.

Pointing to continued growth in the M2 money supply, Maharrey maintains that monetary inflation remains ongoing and that even achieving the Fed's stated 2% inflation target still implies a steady erosion of purchasing power over time. He concludes that investors should consider holding physical gold and silver as long-term stores of value that cannot be devalued through monetary expansion.

Precious Metals News & Analysis - Gold News, Silver News from Money Metals Exchange

Platinum’s Changing Investment Story: Deficits, Geopolitics and New Sources of Demand

Platinum Breaks Out After a Decade

Middle East Conflict Changes the Picture

Why Platinum and Palladium Are Diverging

Russia Adds a Palladium Wild Card

Tariff Fears Send Platinum Into the U.S.

Expensive Gold Gives Platinum Jewelry an Opening

The Investment Case for Platinum

Hydrogen and AI Could Drive New Demand

Could Platinum Outpace Gold Again?

Could Platinum Ever Outpace Gold Again?

What an Awful Jobs Report! And Don't Skip Over the Revisions

Downward Revisions Are Par for the Course

No! We're Not Going to Get Rich Mining Asteroid Gold

A Fool's Errand

Surging Asian Gold Demand Could Signal a "Structural Wealth Shift"

Gold Price During a Recession - Gold vs. the S&P 500 in Every Recession Since 1971 - The 2008 Margin-Call Drop and Four Forces Driving Gold - Money Metals

Does the Gold Price Go Up During a Recession?

Gold Prices in Every Recession Since 1971

What 2008 Actually Teaches Investors

Why Gold Tends to Rise When the Economy Contracts

Safe-Haven Demand

Falling Interest Rates and Real Yields

Currency Debasement and Stimulus

Central Bank Buying

Gold vs. Stocks and Other Recession Assets

What This Means for Investors Today

Frequently Asked Questions

Will gold go up during a recession? http://www.w3.org/2000/svg"; viewbox="0 0 24 24" fill="none" stroke-width="2" stroke="currentColor" class="size-5 shrink-0 transition" aria-hidden="true" x-bind:class="isExpanded ? 'rotate-180' : ''">

What happened to gold during the 2008 recession? http://www.w3.org/2000/svg"; viewbox="0 0 24 24" fill="none" stroke-width="2" stroke="currentColor" class="size-5 shrink-0 transition" aria-hidden="true" x-bind:class="isExpanded ? 'rotate-180' : ''">

Does gold crash during a recession? http://www.w3.org/2000/svg"; viewbox="0 0 24 24" fill="none" stroke-width="2" stroke="currentColor" class="size-5 shrink-0 transition" aria-hidden="true" x-bind:class="isExpanded ? 'rotate-180' : ''">

What happens to gold when the stock market crashes? http://www.w3.org/2000/svg"; viewbox="0 0 24 24" fill="none" stroke-width="2" stroke="currentColor" class="size-5 shrink-0 transition" aria-hidden="true" x-bind:class="isExpanded ? 'rotate-180' : ''">

What if I invested $10,000 in gold 20 years ago? http://www.w3.org/2000/svg"; viewbox="0 0 24 24" fill="none" stroke-width="2" stroke="currentColor" class="size-5 shrink-0 transition" aria-hidden="true" x-bind:class="isExpanded ? 'rotate-180' : ''">

Should I buy gold before or during a recession? http://www.w3.org/2000/svg"; viewbox="0 0 24 24" fill="none" stroke-width="2" stroke="currentColor" class="size-5 shrink-0 transition" aria-hidden="true" x-bind:class="isExpanded ? 'rotate-180' : ''">

Conclusion

Precious Metals Sector Major New Uptrend Alert

Gold Flows Into ETFs Flipped Positive in July as Investors Buy the Dip

Trading Volumes

South Korea Announces Gold Reserve Expansion Through Domestic Buying Program

Markets Question Fed's Inflation Resolve After July FOMC Meeting

Fed Holds Rates Steady Despite Internal Division

A New Communication Strategy Leaves Markets Guessing

Tough Inflation Talk Without Tough Inflation Policy

Bond Markets Signal Growing Skepticism

Balance Sheet Expansion Sends Mixed Signals

Could the Fed Redefine Inflation?

Implications for Gold and Silver

Why Real Interest Rates Matter

Inflation Metrics and the Case for Sound Money